House Insurance on a Land Contract

[bodecia]

My husband and I live in NYS. He is buying our house on a simple land contract, and has only a few years left on it.

We recently discovered that the owner has a house insurance policy on the property, which is in his name, and has no mention of my husband, as the purchaser. We looked into changing policies, but this one remains the cheapest option.

We are happy to keep paying the premium, which is simply added on to the monthly payment, but we would like my husband to be at least named on the insurance policy, as at present it is simply a verbal/handshake agreement that any payout is based on.

We would like my husband's name to at least appear on the policy somewhere, and I understood that if you asked for this, it could be done. The owner is saying this is not possible.

Please advise, as I feel on very shaky ground here if any damage is done to our property.

The insurance company is also demanding that certain things are repaired outside the property, after they apparently undertook an inspection (unknown to us). Who is responsible for the costs on this? If the owner is the named person on the policy, shouldnt he pay it?

I feel he is looking to get the best out of both worlds here, and need some advice!

 

[disagreeable]

It sounds like the owner is claiming to live there, to get a cheaper rate.

 

[army judge]

Google "land contracts".
Your rights are not the same as a mortgage buyer.
You're essentially leasing or renting the home, until you've paid off the purchase contract.

In New York

In some cases, an eviction on a land contact is called a forfeiture, not a foreclosure.

Forfeiture is a kind of foreclosure carried out in case of land contracts mostly. A land contract is a real estate contract in which the buyer agrees to pay the balance of the purchase price to the seller and in return the latter offers him a deed when the contract is paid in full. The seller retains title to the property till the contract is fully repaid.

There are various reasons behind initiating forfeiture. The seller often starts this legal process when the buyer does not fulfill the obligations of the contract or if the latter stops making payments of the land contracts. For instance, the buyer may fail to keep in good repair condition. Forfeiture may also be initiated if the buyer intends to sell off the property to a third party without an approval from the lender.

Prior to the action of the forfeiture, the seller sends a 30 day written notice to the buyer. This notice must meet the following requirements.
The notice must be in writing.

It should state the details of the contract and describe the features of the property.

The notice must state the terms which the buyer could not fulfill.

The notice affirms that the buyer has to meet his obligations or else the contract will be forfeited.

The legal notice should state the amount of attorney fees claimed by the seller.
The 30 day notice gives the buyer the opportunity to clear his payments and satisfy the obligations within this time period. If the buyer fails to cure his default within this time limit, the seller regains ownership of the property and keeps all the buyer's payments. If the buyer defaults again, the seller will have to issue a second notice called the Declaration of forfeiture. This notice gives him another 30 days to cure the default.

In forfeiture, the seller files an affidavit with the county recorder in order to reflect the change in ownership. Upon successful completion of the legal procedure, the buyer becomes a tenant at will and he may have to leave the property within a few days as stated in the contract. Usually the seller starts off the eviction action by issuing a 3 day notice to the buyer to quit the property.

If a buyer thinks that the seller has incorrectly forfeited the land contract, he can file in response to the eviction petition which deals with the issue of ownership of the property. If the buyer can prove that there is no default in the land contract, then he can stop the forfeiture and regain his ownership rights over the property.

In most cases, where the forfeiture is due to non-payment of monthly installments, the buyer can escape the legal action by paying a substantial amount of the purchase price to the seller. But this is not always guaranteed.

In Michigan
http://courts.michigan.gov/scao/courtforms/landlord-tenantlandcontract/ltlindex.htm

In Ohio
http://www.ohiolandlordtenant.com/vbb/showthread.php?18-land-contract-eviction

In Texas
http://www.lonestarlandlaw.com/Executory.html

As a purchaser of a home on a land contract, your rights are few. In many states, you can't buy home owner insurance, because you're legally considered renters!

Read your contract, become well versed as to your rights and legal duties.

You should seek renters insurance, because until you pay off the contract, you can hold no legal interest in the property.

Protect yourself, don't depend on others to protect you, they are misinformed, or are screwing you!!!




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[Terry5048]

My nephew is in the same situation as far as insurance, but the property was destroyed by fire last week. Do you know if he is entitled to any of the insurance settlement?

 

[army judge]

My nephew is in the same situation as far as insurance, but the property was destroyed by fire last week. Do you know if he is entitled to any of the insurance settlement?

Probably NOT.

Why?

Because homes "purchased" on land contracts are simply rentals of sorts.

I suggest you direct him to read the contract.

Furthermore, think of it as a traditional mortgage.

If you don';t insure your interests in the home and it gets destroyed, you get nothing.

Everyone must take out his or her OWN insurance policy.

Failing that when BAD stuff happens, you lose.